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LinkedIn Rakes in the Money

IPO closes up more than 100 percent

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With the stunning success of its initial public offering Thursday, the folks at LinkedIn are suddenly swimming in money. "Each office around the world is having a small celebration," LinkedIn spokeswoman Krista Canfield told Adweek. "In Mountain View this morning at our headquarters we served donuts, smoothies, and coffee."

OK, so not exactly champagne and caviar. But you have to imagine that LinkedIn co-founder Reid Hoffman, who had breakfast at the New York Stock Exchange before this morning’s opening bell, is going to be eating whatever the hell he wants for dinner. Shares for the professional networking site—initially offered at $45—opened at $83 Thursday morning, rose to $122 before noon, and closed at $94 per share, giving the company an $8.9 billion valuation.

There’s a fair amount of skepticism surrounding the IPO, of course. Many are crying “Bubble 2.0!” and drawing comparisons with the late 1990s. CNBC’s Jim Cramer described it as “outrageously overvalued and ridiculous,” while his colleague John Carney tweeted, “We need a new phrase for these wildly mispriced IPOs. Chump & Dump might work.”

LinkedIn CEO Jeff Weiner said that the company’s opening “isn’t necessarily indicative of anything” and told Bloomberg TV that he was “very comfortable” with the initial offering price. But as the Wall Street Journal noted, LinkedIn’s underwriters “left a LOT of money on the table,” meaning more money went to the companies’ investors, rather than the company. “At $90 a share, LinkedIn and its selling stockholders would have raised $705 million rather than $352.8 million,” it wrote.

Still, Hoffman, valued by Forbes at $340 million last year, is worth a lot more now. Maybe he’ll go to Masa.